As part of an overall digitization effort, BNP Paribas Group has allocated $3 billion to its tech research and development efforts this year. Its subsidiary, BNP Paribas Securities Services — a global custodian and securities services provider — received a third of that sum in order to explore emerging technologies, such as blockchain, AI, and robotics, in a span of three years, Bruno Campenon, head of financial intermediaries and corporate client line, told Bank Innovation.

Utilizing DLT technologies is of particular focus for BNP, Campenon explained. The company has already built a platform to electronically record and manage securities issued by unlisted companies using DLT. “The unlisted shares lend themselves well to blockchain: volumes are low and there is a great need for standardization,” he said. “The idea is to create both a primary and secondary market for private company hence providing automation and liquidity to a traditionally manual and confidential process.”

The development and testing of the project have been completed. “We are at the final stages of going live with the platform,” Campenon said.

The bank is also developing a digital fund distribution platform, powered by smart contracts. “[We aim] to make the fund distribution process easier and more efficient, through facilitation of the flow of information between fund buyers and sellers through blockchain and smart contracts,” he said. 

“It will speed up the onboarding process both for the fund buyers and the asset managers.in effect, the fund buyers will only upload their profile and investor documents once through BNP Paribas Fund Link, making it available easily to selected management companies on the platform.”

The Fund Link will also provide investors with fund analytics tools, Campenon added.

A study, released by BNP this week, showed that, over the next five years, sell-side banking executives “expect their own operational efficiency to be impacted most by blockchain and distributed ledger technology (66%), regulatory technology to help firms better navigate regulatory compliance (60%) and big data analytics (33%).”

In addition, to their technology development projects, respondents were also asked about their non-technology priorities. “Regulatory compliance (22%) ranked number-one overall, with achieving operational efficiencies to create an automated operating model (20%) and data quality (15%) were also noted,” according to the report.

The study surveyed “a select group of sell-side senior executives (COOs, heads of operations and heads of technology) at mid-sized banks and brokers in the US regarding their own priorities, and, in turn, what they expect from their custody banks.” The full study is available here.